1. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Chapter 14 Retailing, Direct Marketing, and Wholesaling

2. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  To understand the purpose and function of retailers in the marketing channel  To identify the major types of retailers  To explore strategic issues in retailing  To recognize the various forms of direct marketing, direct selling, and vending  To examine franchising and its benefits and weaknesses  To understand the nature and functions of wholesalers Learning Objectives

3. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Selection among different types of intermediaries 1.Agents 2.Wholesalers 3.Retailers

4. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  All transactions in which the buyer intends to consume the product through personal, family or household use  Retailer: Organization that purchases products for the purpose of reselling them to ultimate consumers Retailing

5. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Add value for customers  Enhance consumers’ perception of the value of products  Facilitate comparison shopping  Enhance product value  Add significant value to the supply chain Retailers

6. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Types of Retail Stores General-merchandise retailers Offer a variety of product lines that are stocked in considerable depth Types of product offerings, mixes of customer services, and operating styles of retailers in this category vary considerably Specialty retailers Emphasize narrow and deep assortments Do not sell specialty items Offer substantial assortments in a few product lines

7. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Table 14.1 - General-Merchandise Retailers

8. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Consumer purchases are influenced by social and psychological factors  Retailers should:  Make desired products available  Create stimulating shopping environments  Develop marketing strategies that increase patronage  Identify an unserved or underserved market segment  Requires strategy that distinguishes the retailer from others in the market segment Strategic Issues in Retailing

9. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Location of Retail Stores Least flexible variable of the marketing mix Dictates the limited geographic trading area from which a store draws its customers Location of the firm’s target market and kind of products being sold Availability of public transportation Customer characteristics and competitors’ locations Characteristics of the site - Size, shape, and visibility Compatibility with nearby retailers Factors to be evaluated

10. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Should appeal to its target market  Atmospherics: Physical elements in a store’s design that appeal to consumers’ emotions and encourage buying  Help create an image and position a retailer  Factors used to influence customers  Music, color, complexity of layout, and merchandise presentation Store Image

11. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Use of the telephone, Internet and nonpersonal media to introduce products to customers  Nonstore retailing: Selling of products outside the confines of a retail facility  Accounts for an increasing percentage of total sales Direct Marketing

12. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Direct Marketing Organization provides a catalog from which customers make selections and place orders by mail, telephone, or the Internet Advantages Efficiency and convenience for customers Lower costs for retailers Catalog marketing Retailer advertises a product and makes it available through mail, telephone, or online orders Has resulted in some products gaining widespread popularity Direct-response marketing

13. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Direct Marketing Telemarketing Performance of marketing-related activities by telephone Generates sales leads and improves customer service Speeds up payments and gather marketing data Television home shopping Presents products to television viewers encouraging them to order through toll-free numbers and pay with credit cards Products can be demonstrated easily Online retailing Makes products available to buyers through computer connections Poses a threat of identity and credit card theft

14. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Use of machines to dispense products  Most impersonal form of retailing  Accounts for a very small minority of all retail sales  Provides efficient and continuous service to consumers in areas of heavy foot traffic Automatic Vending

15. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages  Supplier grants a dealer the right to sell products in exchange for some type of consideration  Franchiser receives a percentage of sales for supplying:  Equipment and buildings  Management know-how and marketing assistance  Franchisee  Supplies labor and capital  Operates the franchised business and agrees to abide by the provisions of the franchise agreement Franchising

16. ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ©wecand/GettyImages Advantages of Franchising For the franchisee Aids in starting a business with limited capital while receiving guidance and advice from the franchiser Franchises are more successful than independently-owned businesses Guidance and advice from the franchiser at little or no cost For the franchisor Gains product distribution without the high cost of operating its own outlets The franchisee is highly motivated to succeed Success of the franchise means higher income for the franchiser